What are binary options?

As it turned out, in recent years it has intensified suspicion of unscrupulous binary options brokers and have been actively working the phones. Most of these people have no idea what binary options are, and what they eat (many even are usually called binary auctions). So after almost four years of blogging necessitated something like this article. Beginners welcome, experienced traders pass by, you already know it.

Binary Options are the type of options in which the payoff can take only two possible outcomes, either some fixed monetary income or nothing at all.

Wikipedia

So, what is a binary options really are? In this article I will answer 7 basic questions asked by beginners in the beginning of his acquaintance with binary options.

What are binary options?

Binary options is a financial tool that allows you to earn at the expense forecasts for the change in the prices of market assets. In simple terms, a binary option is a bet that will increase the price or will fall. Just say that binary options is not a game, so you need to treat them accordingly.

Binary options (BO) exist in the market since 2008 (I should say that there are no binary auctions do not exist). There were actually more of Forex as a simple alternative to requiring a lower investment. Binary options you can trade in currency pairs (EUR\USD, GBP\USD), shares (for example, Gazprom, Apple), commodities (silver, gold, etc.) and indices (eg DOW JONES, RTS).

Binary options trading – what is it?

Binary options trading is to purchase options to increase (call) or decrease (put) the market quotations for the purpose of receiving subsequent profits. Sounds more complicated than it really is. Give an example of a binary option. Let’s say you bet on the rise in the price of gold until the end of the hour. If at the end of the hour the price of gold is higher than at the time when you bet, you get 70-90 percent of the profits from the size of your bet. No matter how the increased price, even if it rose just one point – you still win.

About what you need to know to correctly predict the rise or fall of the asset, vchera I wrote the article on the binary options on earnings (see “walkthrough”). I recommend to read. Or a more detailed article about learning.

Binary options broker – what is it?

Binary options broker is an intermediary company between the trader and the market, providing trading platform, in fact through which customers of the broker can make transactions. Roughly speaking, this is the place where you directly sell. Therefore, the choice of broker for trading must be approached with full responsibility. Because in this area, as elsewhere, you may come across Scam brokers, fake quotes, do not derive a profit, etc. are Advised to immediately read the memo about how to choose a binary options broker and reviews. There are regulators that are periodically fine brokers, but it helps a little (after all, the turnover of brokers Scam not a joke).

Trader binary options – what is it?

Trader is a profession, which is based on earnings due to speculation in the ever-changing market quotations. In fact, if you are trading binary options you are the same trader. Congratulations on your new profession. However, to become a successful trader and start earning steadily, you need to learn a certain amount of information.

What is the signals for binary options?

Signals for binary options is a recommendation to purchase options. Signals notify traders what option you need to buy, when to open a trade and what time the end of need to put. Give an example of such a binary option: receiving a signal GBP/USD put 13 00 MSK, we need to choose on the platform of the broker a specified asset (GBP/USD), put it up for sale (put) with the closing time of the option, at 13.00 Moscow time. The results of my signals I publish daily in their accounts in the social. networks. For example, here.

What is the time frames in binary options?

Timeframe in binary options – is the period of time, which actually resulted in a change of quotes. For example, if the price of oil rose for an hour at 2$, we can say that growth has occurred on the hourly timeframe. For the analysis of the graph is taken to group 1 of the 9 major time frames:

1 minute (M1),

5 minutes (M5),

15 minutes (M15),

30 minutes (M30),

1 hour (H1),

4 hours (H4),

1 day (D1),

1 week (W1),

1 month (MN).

What is binary options a Scam or earnings?

The network recently there have been a lot of controversy and opinions about what is binary options: divorce or real earnings (I even had to dedicate to this topic an article). The reasons for such a range of opinions a few:

This scams, binary options brokers that discourage beginners desire to continue to engage in this activity;

And dubious pyramid of trust management;

And, of course, search strategies-Grails (which, unfortunately, does not exist), and unwillingness to learn and develop.

Those same traders who are willing to learn something new and serious trade, as a rule, profit is all right. Patience and hard work, as they say. About other errors that often make new traders you can read here.

How to place a binary trade

Steps to open a binary trade;

Identify the underlying asset to trade e.g. the price of gold, the Facebook share price or the GBP/USD exchange rate

Set the expiry time (The time the option will end), and decide on the size of the trade or investment

Decide if the value will rise or fall (Call or Put)

Binaries are traded online. There are a range of brokers, all of whom will provide binary trading via dedicated websites and also across mobile devices via apps. Some will offer binaries “over the counter”, others via an exchange – but they all follow the same process to open a trade.

These trading platforms will vary to a certain degree, but many will share common features. Most of these brokers will offer demo accounts, enabling potential new clients to try out their trading platform.

The steps above will apply at every single broker. As a trader gets more advanced, more layers of complexity can be added, but in essence, the attraction of a binary option is in the simplicity, and ease of managing risk.

In terms of strategy, and how to trade these type of options well – they are a unique investment. There are a number of strategies and trading styles. From technical analysis to fundamental research. Trader education will be key to any success in binary trading. Our articles will hopefully provide both education and up to date news. Allowing traders to improve their results month on month.

Conclusion

I hope I managed to clarify, what is binary options actually (and no they are not binary auctions). For me personally, is not only interesting, but at the moment my main source of income.

Your capital may be at risk. This material is not an investment advice.

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HIGH RISK INVESTMENT WARNING:

Binary Options and Forex/CFD carry a high level of risk to your capital due to the volatility in the underlying market. These products may not be suitable for all investors. Therefore, you should ensure that you understand the risks and seek advice from an independent and suitably licensed financial advisor.